International Business Machines Corp. (NYSE: IBM) recently said it will release the world’s largest supercomputer next year. Its stock did not react. IBM is too far behind others in the tech sector. Earnings helped its stock price earlier this year. But, even with the results Wall Street has favored, IBM’s stock has gained only 35% year to date. The S&P 500 is 24% higher. The stock of AI industry leader Nvidia Corp. (NASDAQ: NVDA) has risen 177% since the end of 2023.

IBM’s trouble falls into two categories. It is too small to compete with the industry giants. Additionally, it lags far behind them in cloud computing.

As artificial intelligence (AI) moves toward becoming the revenue driver for big tech, the most crucial current measurement is the market share of the massive cloud computing business. According to Synergy Research Group, IBM’s market share is 2%. Amazon.com Inc. (NASDAQ: AMZN), the industry leader, has a share of 31%. Microsoft Inc. (NASDAQ: MSFT) is in second place at 20%, followed by Google at 12%. Industry cloud commuting revenue worldwide was $84 billion in the third quarter, up 23% compared to last year’s quarter.

IBM’s total revenue in the third quarter was $15.1 billion, which was 1% higher than the same quarter the year before. It lost $330 million, compared to a profit of $1.7 billion in the same quarter a year ago. Its revenue is a small fraction of that of companies like Microsoft and Nvidia and is growing much slower.

Another measure of IBM’s trouble is its market cap of $204 billion. Microsoft’s is $3.2 trillion, and Nvidia’s is $3.4 trillion. Finding a better summary to explain IBM’s current problem is hard.

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